Watchdog to tackle banks on debt deals

THE Government is close to finalising proposals for the establishment of a new watchdog which will be tasked with limiting the ability of banks to veto personal insolvency deals.

The watchdog, which may be set up within the Personal Insolvency Service, is due to be unveiled after Easter as part of the Government's plans to resolve the mortgage crisis.

Cabinet ministers are adamant that deals with stricken householders are being unnecessarily vetoed by some of the mainstream banks.

Senior government figures, including Taoiseach Enda Kenny, Tanaiste Joan Burton and Finance Minister Michael Noonan, have been briefed in detail on a number of cases whereby banks have abandoned negotiations without a solution.

The new watchdog may be set up independently or else within the structures of the Personal Insolvency Service. It will be given powers which force banks to justify in detail their decision to "pull out" of talks with mortgage holders.

And the watchdog will also examine the manner in which negotiations take place in a bid to determine whether the interaction can be improved from the customer's point of view.

Speaking to the Herald, Ms Burton strongly hit out at the manner in which banks are engaging with customers in arrears.

funds

"The banks have to come to the table. They really have to come to the table. Taxpayers in Ireland, they (the banks) know, we know, have given them huge amounts of capital funds at huge personal sacrifice of people all over the country in terms of the bailout," Ms Burton said.

"They need to do deals. We don't want people with huge parts of their thirties and forties taken up with mortgage distress," she added.